The cryptocurrency market saw a surprise bounce as Bitcoin (BTC) looked set to break the correlation by surging past the $20,000 price level in the past 24 hours despite the stock market slump.
It is understood that the rebound occurred due to investors in the stock market making massive sales, seeing the S&P 500 index fall by 1% while the Nasdaq fell by 0.5%.
According to Coinbase Research, crypto is correlated with traditional market beta 2* and BTC should show consistent performance to protect against inflation.
*A measure of volatility or systematic risk
However, BTC is not only dependent on the stock market but its price is rising due to S&P 500 speculation according to Kevin Svenson, a major crypto influencer.
He added that the digital asset will not fall quickly even if it does not rise as fast as the S&P 500.
A rise in the price of BTC will also make the stock market rise, while if the opposite happens, the crypto market will fall again.
In today's spotlight, Federal Reserve (Fed) Chairman Jerome Powell's speech will play a big role in the movement of cryptocurrencies to bounce back.
Meanwhile, Ethereum (ETH) is also poised to break the $1,400 mark by bouncing over 6% in the past 24 hours with several other cryptos also rising such as Solana (+5%), Polygon (+5%) and Terra Classic (+56%) ).
